Senate and House pass major no-fault auto insurance reforms
After years of failed attempts to reform Michigan’s unsustainable no-fault auto insurance system, the Senate’s acted swiftly to pass their version of reform (Senate Bill 1) on Tuesday (5-7-2019). The next day, the House passed its own version of reform after a marathon Wednesday session that stretched into early Thursday morning.
The House version would provide five levels of personal injury protection, with rates for that coverage cut 10 percent for the current unlimited, 30 percent for a $500,000 cap, 60 percent for a $250,000 cap, 80 percent for a $50,000 cap and 100 percent for opting out of PIP entirely for those that already have health insurance. The rate cuts would have to remain in place for five years.
The absence of a mandated rate reduction on insurance companies was one of the reasons Governor Whitmer threatened a veto of the Senate bill. It is believed that, in addition to making changes to garner enough House votes for passage, the House changes might help dodge a veto by the governor.
The bill also would install the workers’ compensation fee schedule on what insurers would pay health care providers for various procedures just as the Senate bill would do.
If the Senate quickly adopts the House version substantive no-fault auto insurance reform could be on its way to the Governor’s desk as early as next week. It is likely that negotiations between the legislature and the governor on a final bill will take place before final passage to avoid a veto.
NFIB has been working to fix Michigan’s costly auto insurance system for many years. During testimony before the Senate Insurance Committee in February, Charlie Owens, State Director for NFIB in Michigan, told the committee that a survey of its small business members showed 76 percent supported reforms that would allow customer choice for selecting Personal Injury Protection levels and implementing a medical fee schedule to control claim costs.
